tv Squawk on the Street CNBC August 9, 2013 9:00am-12:01pm EDT
welcome back to "squawk." the stock of the day. >> i thought it was going to be jcp but it's not. it's dendreon. >> announcing cfo's resignation. cutting price targets this morning. >> thanks for being with us. that does it for us today. have a great weekend. right now it's time for "squawk on the street." ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with kelly evans at the new york stock exchange. she's right here. cramer and faber are off again today. joining us at post flin, michael, senior editor at yahoo! finance and financial reporter at the "washington post." guys, good morning to both of you. >> good morning. >> markets leaning red this morning after avoiding the first four-day losing streak of the year. we have at least six ipos on the
docket. may be seven. we'll find out more in a few minutes. watch bonds today. investors pulled $4 billion from treasury funds in the weekended wednesday. you're going to hear more great rotation talk today. road map begins with blackberry open to the idea of going private. also, priceline beating expectations and the shares approaching new highs, not seen since the dotcom era. it's shark week on wall street as our our guest likes to say. hedge funder bill ackman pushes jcpenney to push up its search for a ceo. published reports say the smartphone maker is warming up to the possibility of going private. the company's board are said to be increasingly coming around to the idea. no deal is imminent and blackberry has apparently not launched any kind of sale process. interesting though, guys, reuters is saying they're having discussions about collaboration with silver lake. nothing regarding m and a but
just in a time when they're involved in another high-profile deal. mike? >> i think no growth or growth challenge tact with a lot of cash. it makes sense to ask the question. $3 billion or so in cash. i find when people say, if you go private you kind of get out of the glare of wall street. you don't have to worry about short-term results. it also means if you can shrink a business, you can shrink. >> yeah. other options, of course still looking at licensing their software. but i was amazed at some of the market cap figures. $84 billion. i mean, it's hard to get your head around how much the market cap has sh runk on this company. >> it's a really good example of how quickly the fortunes of a business can turn around. especially in a volatile effese like tech. you look at microsoft. this is a business that i think can really turn on a dime. we'll have to see if blackberry can pull out.
>> would it make sense, mike? is there a buyer that would make sense? >> i don't know if there's a buy their makes sense. you have to position blackberry as a niche cult product. i don't know if there's room for four big mass market smartphone makers. in the licensing thing kicks off, who knows, that could be another avenue. >> we had this discussion yesterday. the guy we had on from idc said, you know what, they're never going to unseed the number one player or number two players but carriers do like choice. players do abhor a duopoly. >> and they do still see have residual loyalty on the i.t. corporate end of things. >> you still see them in d.c. >> many of the people i know, feek folks on the hill carry both. they cannot give up the keyboard. there's a big government contracting angle to this as well. >> people talk about the operating system, the fact that apple is a closed system,
blackberry as well, opposed to the androids of the world which are more open and more vulnerable to security threat. as you see companies, whether it's the pentagon or otherwise, shifting and allowing more of their employees to use come of these open based devices it's going to be an important hurdle and a problem. again, for the traditional players in this space. >> keep an idea on the short interest obviously to their -- i've talked to some fund managers from whom it is a top holding because they're betting on something transformative happening in the not too distant future. >> priceline shares rising sharply premarket. they're near dotcom era highs. we'll explain a little bit more about that. the travel website posting second quarter results that beat wall street forecast. profits up 24% in the period, the surge in summer travel booking. guys, a couple of interesting things happening here. you've got the read-through with regard to strong period for them. perhaps a little bit of mark share. gains again. i want to go back and thanks to reuters for this.
priceline shares are 900, 93, 94 premarket. that is a nominal high. they did a six for one reverse stock split back when shares collapsed. the highest thing you probably saw them trading, mike, in 1999 was 160 or something in that range. that was equivalent to where we are today. on a price basis we're basically matching the previous highs. what's really interesting is if they go above 1,000, first s&p 500 listed company to do so. >> interesting. yeah. >> yeah. >> used to be actually that would preclude s&p 500 from putting -- in other words,, if you start out at 1,000 they want it in there. that might be changing. it's funny vogue for high priced stocks right now. one explanation, one small piece of why share volume is so low. the average price of the stock has never been higher. >> the weird thing is there are some people who say maybe the fact, so why is this happening? why are stock splits becoming less common? think about it from the exchange or brokerage point of view, you get fatter commissions on higher
priced fairs. that's fine. is the snake eating its tail? if it's ruining volumes, that can't be a good thing. >> i think it's corporate fashion. it's just fashionable to have a high-priced one right now. there's no real downside to it. it used to be you wanted to have cheap enough for retail to buy 100 shares. it doesn't matter anymore. >> only seven stocks on s&p priced at 400 or more. apple is the only one of them which is not higher on the year. as for the quarter itself, it wasn't bad. $8.39. revenue up 27%. margins up to 82.4. international bookings up 44%. so the travel trend, we saw what trip adviser has done in the past couple of weeks. >> best performers on the s&p 500 this year. >> i find it interesting. people talk about 2000 bubble era highs, going back to it. priceline is one of very small number of cult growth stocks that have a fat multiple but even at that, it's 30 times this year's earnings. it's not 200 times. it's not infinite.
you get away from tesla and you can't find on insanely valued customer. >> you can look at a linkedin and say it's far more over valued from that point of view but doesn't necessarily seem to matter. look at what apple shares have done, they have collapsed in setting their highs. meantime, as we mentioned at the top, the week is ending with the bang in the ipo market. half dozen companies set to make their wall street debuts today. among them another company going public. cvent is under the ticker symbol cvt. we're going to talk with the ceo one it begins trading. some have priced above the range, some below, some in the middle. my question, mike, in our conference call this morning i said is this the double click party. are we going to look back at today and think that was it? >> i don't know. obviously pent up demand for ipos following facebook, the window closed.
now the markets are new highs. sellers like the valuations. i'm focused on one component of the ipo market which is the private equity firms bringing their portfolio companies public. that's been disproportionally account for a lot of the volume. those stocks have not done that great. seaworld has done okay. >> great point. >> so basically they're kind of hitting the markets bid. i think in general, though, it's understandable to have this level of activitactivity. speculative stats are rising but i don't think it's crazy yet. >> the cvent name is huge in the washington area. i mean, big employer of a company that is used a lot when it comes to events, et cetera. they really fast track their ipo thanks to the jobs act signed last april. we've seen more companies taking advantage of this. >> i think that's something that we will have to see if more companies will take advantage of. 93 companies that have filed for ipos under jobs act sort of new qualifications. but i think that also raises the note of caution for investors as well because you're not getting
the full look at companies books that they would have had before. that can cause some -- you can see some potentially budding problems within a company when you get that closer look at what that accounting issues might be, that's something to watch for. >> there has been a lot of talk this week about strategists and how bullish they are. "usa today," 1700 club. one of those who was stubbornly bearish at 1600 went up to 1750. again today says you look at trailing, forwards, shiller pe, you look at s&p in gold terms and oil terms, still at least reasonably valued. is there anything wrong with that argument? >> no. although the schiller pe is high. if you look at the ten-year trailing you worry about the long-term forward returns. no, i think we're in an valuation zone where it's neither cheap or up. the duration of the recovery, not so much the strength of it.
people say -- i find it interesting saying strategists are getting bullish because the targets are not that high. >> right. high given where -- >> not that high. >> what about the notion that this -- the rotation front, these lipper figures from the weekended august 7th, $4 billion out of treasury bond funds. more into equity inflows. then you've got bill gross saying, ride it out, ride the volatility. right? >> i mean, obviously retail chases new highs. and it's a recognition phase. basically we're now paying for the fundamentals that have been proven out for the past three years and paying relatively high price for it versus what we paid in the past three years. >> interesting as well to take a look at the great rotation. the main question on everyone's mind has been is this really happening? there are a lot of people who still don't think despite some of the record weeks we've seen with treasury funds, despite the weeks we've seen with equities, mike, that, you know, a drop in the bucket compared to the long
term. >> it's not a big number relative to how much came out of equities. i feel like it's a grudging rotation. i don't think anyone is excited about it. people don't like the idea of buying the new high. but basically with fresh money if you're luking at your options, i think more of it is being shoved in the equity direction. >> a lot going into for equity as well. >> not a determinative of how the market does. everybody rotating in, someone is selling to them. okay? it's all a matter of who is more urgent, the buyer or seller. >> how about, do you think the retailer, the retailer investor, is -- tom liesman said they're spectating at this point. don't want to join in. keep reading stories about the 1700 club and reminds them of the hot stove. >> it's true. my read on it is that very, very wealthy individuals are in. they're exposed to stocks. they feel it. they probably own some all along. you go down from there and i think again, it's very grudging. it's only -- it's a very uncomfortable feeling. response to my articles are almost uniformly skeptical.
>> you get hated on. marianne bar tell is telling us the other day that only the ultrawealthy when he talked to merrill lynch clintsz invested in this market, the bar for ultrawealthy is, what, $3 million in assets? 30 million. some ridiculous higher. >> higher. >> 30. i can't believe it. >> thanks. >>. still to come, the bill ackman effect on jcpenney. we'll hear one analyst's take on penney's surge. we might be right back there with implied open at 24. more live from the post pine at nyse when we return. [ male announcer ] these days, a small business can save by sharing. like carpools... polly wants to know if we can pick her up. yeah, we can make room. yeah.
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price target at 27 although that may change. are you wavering at all on that target? >> no, long-term turn around story. i don't think the company goes out of business, but i'm not really thrilled with all of the drama going on in the last few weeks. >> yeah. more essentially as a two-front war now. war with the consumer trying to get them back and a war with one of their own. >> yeah. and i think the board's strongly worded statement is correct. this is a distraction they don't need right now. and i have to concur with that -- with their assessment. >> your $27 price tart is predicated on the ceo coming back in and turning things around. this is from david's report. this is our most profitable short of 2012. though the retailer is poorly positioned the shares rocketed in early 2012 based on over hyped prommises put forward by a highly pro mogaal ceo.
the shares went on to ration rationalized when they realized the ceo was not going to do anything wonderful to turn things around. why is this not going to happen again? >> they changed their business strategy. let me point one thing out. at the time he was getting in his short i agreed with him. i also agree with him covering his short. so i was -- i had a sell rating on the stock most of the way down and since they've changed their business model going back to trying to get the customers that they fired, essentially, under the previous ceo, and they've got funding, i'm much more bullish on the stock. >> you get to this point with retailers and the typical, you know, vendor nervousness kind of rumors come out there. how does management at this point without a permanent ceo, you know, try to kibnd of calm those fears? >> i think that's one of the questions. but one of the reasons that i did turn bullish is it is fairly clear to me the vepders are working with jcpenney. they allowed them to extend
their days bay paiable from about 30 to almost 60. so as long as the vendors are working with a retailer, it's very difficult for that dealer to have to file. >> do you think the reports about cit were true? and was if cash level, is it lower now than you thought it would be at this stage? >> it is -- it's about where i thought it would be. there are some moving parts in there. there was an accrual that i think has to be reversed. i think they're building a little more inventory. so it was about where i was. i think the cit rumors were taken out of context. i think they took a point in time. i believe that that was a normal negotiation that was going on between jcpenney and cit that really was not necessarily press wort worthy. >> the journal today tries to talk to some suppliers. they think coumps could be down another ten. home category is running 50%
below plan. is that true? >> i have no information. i would say that i think the home category has been disappointing. i think there was some moving parts on the comps in the second quarter that the company had to overcome so that the second quarter is setting up for a better second half. there were some pricing changes that took place over time in the second quarter that are going to hurt gross margin. and i think the home category -- by the way, he didn't have anything to do with it. >> no doubt about that. >> i think the merchandise is inappropriate for their core customer and that's the customer they have to get back. i would not be surprised to see that liquidated throughout the next few months and home reset to the way it was under the old jcpenney. >> this brings up the point, how much is this turmoil at the top really impacting the store experience, impacting the shopping experience for customers as they're about to launch into the middle of back to school season which is one of
the second biggest season of the year for a retailer like jcpenney. >> it's very distracting for everybody. nobody wants to see it. i think this story is going to come down to three things, cash flow, cash flow, cash flow. and i think whoever is the ceo has to focus on that. and mike i thought was a good choice because he always focused on cash. he wanted to keep $3 billion on the balance sheet that have no net debt. so he was very conscious. i thought he was a good choice as the interim person. i think the new ceo, whoever that is, is going to really have to focus on that position. >> should it be questerim or not? >> i think the street would love to see mr. questrom but i don't think he wants the job. i think his name has been bantered about from the beginning just because of his history with the company and he's just -- he's a fantastic e reta retailer. i think any involvement with him
would be a good thing. >> rick, thank you for coming in. >> thank you for having me. >> now 24 hours ago art cashin told you how the bulls needed to seize control of the market again. what's on his mind this morning. art will visit us right here on post nine when we come back. and we got a ipo barrage on tap today. we'll bring you the opening trades of several companies making their wall street debuts. plenty more "squawk on the street" in two. [ male announcer ] here at optionsxpress, our clients really seem to appreciate our powerful, easy-to-use platform. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price. and let it do its thing.
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about seven minutes to go before the oping bell. let's bring in art cashin in. yesterday we were talking at how the bulls needed to seize control. in market it was a weird day yesterday. up, then down eight at this time points, closed up. did they manage to seize control of the end there and how are we looking today? >> not fully. if you recall we discussed the fact that the better opening wasn't important. what actually was important was holding those gains and possibly building on them. and the opening rally unfortunately had a shelf life of about 32 seconds. and -- >> he timed it, obviously. >> yes. they did rebound but not conclusively. 1700 presented quite a problem for the s&p. it challenged that level about seven or eight times yesterday. >> wow. >> it was unsuccessful.
so we'll see how it develops. it should be a quiet summer friday. however, as we said yesterday, ramadan is over. friday prayers on the cairo streets may draw some attention. we'll look to that. i'm quite happy to see that at least this morning this dollar is rallying a bit and yields are up a bit. if we had continued with a pattern of yields down, dollar down, and stock market down, you would begin to wonder whether that was the economy turning suddenly so bad that they would not taper but that tapering would have no impact on the economy. >> right. >> you know, art, i guess i wonder if you've had a few of these kind of incomplete corrections this year where just rested a while and pulled back and rebuilt some momentum. does it feel the same this time around? >> so far it does, but the internals look a little damaged. as you and i discussed, the advance/decline, a few other things, you look at the disparities between the etfs and
the components of the etf rz t not completely 'n sync. and that indicates, in spite -- i don't think the vix works anymore, to tell you the truth. but despite the fact that the vix is quiet that tells me there's a little anxiety around it. the check engine light is still on. >> well put. art cashin, thank you for your time this morning. have a great weekend. big day down here at the big board. we are literally overflowing with ipos today. you will want to see how they open for trading one by one. we'll get the opening bell in less than four minutes. ♪
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[ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ you're watching cnbc "squawk on the street" live from the financial capital of the world. opening bell set to ring in 45 seconds or so as we wrap up an eventful week for august, i'll tell you that. look at the news flow today. you've got obviously the board strife at jcpenney. blackberry reportedly open to the idea of going private. priceline may hit $1,000 for the first time ever. and not to mention the half dozen or so ipos that are set to happen, most of them here at the
big board today. there's the opening bell and the look at the s&p 500 at the top of your screen. at the big board cvent, management platform celebrating its ipo. we're going to talk to the company's ceo in half an hour. over at the nasdaq, micron technology, mu, doing the honors. >> ziing next to me, that's how busy it is on the floor today. >> it is loud. >> i know you said something. i'm not sure what. i know you just spoke. >> smiling and nodding. >> on cvent, ticker cvt, priced 5.$6 million at 21. above the range, mike, of 17 to 19. morgan stanley, goldman sachs, joint book runners. it will be an interesting test to see how all of this is digested today. >> i think this is the kind of name where portfolio managers want, pure play exposure to this area. this makes sense to me as an ipo. it's the private equity guys coming back and liquidating.
interestingly not really redeploying the cash. they're not buying anything right now. >> right. >> not much. >> all right. you normally don't get an encore round of applause here. would you characterize it as a rush to the exit? >> no. they're seasoned enough. owned them for a few years. the pig in the python will be hilton. >> i was going to say what would you do if you're blackstone in would you rush this one out? >> i don't think so. don't rush it but don't wait around. the valuations are there. the industries obviously on a upswing. >> exactly. metrics look good. the market looks good. i guess the question though is with such an a. big and important ipo for them, you know, is it worth rushing or should you wait and hope things kind of settle down and fundamentals look better in six or nine months' time? >> i don't think they're looking to do it very soon. they just need the underwriters. so i don't think you necessarily want to wait. you're not really leaving that
much on the table, i think, if you kind of participate in today's valuations. >> right. >> take a look at the biggest gainer on the s&p this morning. not a surprise. it's pcln. priceline is up almost 6%. last sale at 988 but obviously people want to see if that gets to four digits. year to date up 59%. and then close to the leading the laggards, almost the number one loser, jcpenney, is down about 3 1/2%. dig discussion we just had. but you know what, so is the gap, gaps leading down. pulte, masco, kroger, some of the -- sherwin williams. >> penney closed up 6% yesterday on that ceo turn over speculation. they're giving back a little bit of that this morning. not terrible. >> i think the journal had something about back to school does not look particularly strong just yet. at least for teen. so maybe there's a little bit of weighing on sentiment. >> i think at one point they've that was brought up is back to school is for teens and teens are folks who don't have jobs
right now. summer jobs aren't necessarily pulling through. where are you going to find that spending coming from? >> right. >> blackberry, 5 1/2%. it's going to get a pop here. we mentioned the short interest in the name. which i think has probably come down from the high earlier in the year. this notion again, if you haven't read the story out of reuter, the board are warming up to the idea of going private. reuters terms, quoting a source, there's been a change in tone on the board. also holding some discussions about collaborations in mobile computing with silver lake which would -- it is a nice mental sx exercise to see could silver lake combine with something in canada, right? >> it is very. i mean, oath either you look at it two ways. they have experience. they've kind of schooled themselves on how to do this in the industry. or they're kind of a texas hedge. kind of, you know, over-exposed maybe to no growth tact. i don't know. >> ylan, the market obviously
has had a better year than people thought at the beginning of the year. how is all of that playing in the beltway? how does the beltway see that? >> you know, i think there's actually a lot of concern about sort of what we talked about before, which is, you know, are we seeing a sale of who consumers here. there's concern that the rise in the stock market is actually something that's benefiting the wealthy, benefitting the 1%, et cetera. and where does that leave the rest of americans? there's a lot of focus right now on supporting middle america, seeing middle income job growth. there's some concern that, you know, is this creating a situation where the highs on the stock market actually creating greater income and equality in america. that's the message that lawmakers -- >> what is it going to take for companies going public, right, and creating capital, right? one day hiring because you need to hire eventually if you're going to grow. >> we need to see the hiring come through. that's the problem. even though you're seeing stock
market highs. even though you're seeing companies sit on record amounts of cash, it's not translating to the level of job xwrogrooe grow need to get the economy running. that's the disconnect between the jobs and gdp and stock market and payrolls. >> i wonder how the fed reconciles that. it has played some role in helping financial markets have this front-loaded recovery. that's really seen or the of sync with the economic recovery. how do they try to prepare those things? >> i think that ben bernanke has said savers wear many hats. the rising stock market can help people's 401(k)s, maybe them feel wealthier. however, i think there is a concern that among some officials is this round of qe really getting the traction that they had hoped that it would get? and, you know, there's concern that there's rising costs associated with increasing asset purchases and so that cost benefit analysis is getting trickier. >> we'll see what happens later
on today. good points. let's try to find bob pisani. bob, do you know which post to go to this morning. >> it's been a tough one here today because we're waiting for cvent to go and i think it just went here. the indications were 26 to 29. and there are some -- not clear of an entirely priced right now. it's been a crazy week. we can barely move down here on the floor. we've priced five ipos overnight. it hasn't opened yet. they're still screaming over here. look, the story is six ipos. my head has been spinning all night here trying to make sure i got the numbers right. nine so is far this week. this has been a hot month obviously because the stock market is doing so well. here's what's hot in ipos. first is biotech. we saw that with intrexon yesterday. had a fabulous opening day. anything that's software in the cloud. we see this today with cvebt. cvent is essentially software management. event management software. 5.6 million shares.
indications are 26-29. $5.6 million, $21 end canindica. not really an ipo, already trade in johannesburg in south africa but a lot of people are treating it as an ipo. they priced it $16. very hard to get around here but i saw indications of $18 to $21. so here's your second hot story here. anything related to software in the cloud essentially, sass is what it's called, is hot. indicated by these two. third thing that's hot right now is anything that's sort of in the master limited partnership area. this has been going on for a long time because obviously it's a yield play. we've got two of them that priced today. world point terminals which does oil terminals. they priced 8.8 million shares at $20 apiece. unfortunately i can't see the indications on that. that was the middle of the range. they had 6% yield. that's what people are buying them for. qep midstream partners, $21
each. that was higher than expected. that also got a 5% yield. again, we seem to be getting closer to opening it. 29 to 31 now. cheering not because it opened but because think keep raising the indicated prices here. so right now cvent is $292031. remember, it priced at $21. and it was the price talk was $17 to $19. let me move on here and i'll keep an eye on cvent quickly. another hot big area is big data but there's no t a lot of ipos out there. we covered one a couple months ago. data, just had their earnings out. excellent well above expectations. guidance was raised. that stock is upping to the upside. added 1500 new customers. finally, the china economic data keeps getting a lot better. we saw it today with the overall industrial production numbers. yesterday was sold with the export and import numbers. bottom line, the real story today is we're getting better china data, some stabilization
in europe with money going into it, and generally better economic news except for the jobs data in the u.s. the outlier is japan because every time we see the yen moving up, the markets have major problems. there's the big worry as some concern that faith in abeonimics may be waning. cvent is opening from $29 to $31. anything having to do with software in the clouds. i'll be standing here trying to move around but the whole floor is full from people from five different companies here. these are all family members that are all here. >> i know. >> it's just a great day to have people come down here and participate in capitalism and, you know, the greatest place in the world, capitalism on the floor of the new york stock exchange. it doesn't get any better than seeing the families down here. this is what i really love about this job. >> bob pisani, thank you very much, sir. just to mention as well, a couple other listings which have just priced. franks international, which is the biggest one of today. we understand is moving higher. on the flip side, world point
terminals is moving to the downside. there you can check out what we're seeing about 0.3% decline. it's not uniformly to the upside. let's head up to the nasdaq where we have one listing, more going on as well. seema? >> a lot of big stories in tech land, kelly. as you can imagine, blackberry catching the a tension of wall street. blackberry is warming up dot idea of possibly going private. keep in mind there has been on going speculation around blackberry considering a strategic option, whether it's splitting up the business, partnering up with a company that has a footing in the mobile enterprise base or perhaps going private. now i spoke to peter at jeffries this morning and he says that's one of the reasons he has a buy redding on the stock he says going private makes sense as it will give blackberry breathing room to execute partnerships and sell-off the struggling smartphone business. android vendor like samsung or
would be a good partner for blackberry. shares for blackberry, up today, lost $30 billion in market value since the first iphone came out in 2007. and a quick check on some of the other stocks on the move. it's not just all about blackberry. it's also been a very notable quarter for social media companies. facebook beating expectations. as did groupon yesterday. the stock witnesses the biggest move since it ipo'd. today 45 buck as share. a move we've seen from a lot of analysts after the stock crossed the ipo price of $38 a share. right, carl? >> yes. that's exactly right. thank you, seema. bob pisani just over here telling us that cvent looks to price between $33 and $36. nice gain having priced at $21. and that itself was above the range of $17 to $19. you mentioned world point trading down. and then frainks, which is actually the biggest one we're looking at today. that looks like it's up 25% on the first trade. dutch energy services company which handles the pipes and the
tubes that are used by offshore oil wells. mixed telematics. a lot of these companies are not u.s. based. fleet asset management software, priced at $16. that was the high end of the range. goes to almost $20. >> going to mike's point here, the one that we're keeping an eye on, why? pe backed. >> yes, this was bought -- basically they deliver building supplies to construction sites. it's a southern-based company. in trouble in 2009. bought out of bankruptcy. they had to reduce the size. i think they kind of missed their optimum window for home construction related stocks which peaked this year. >> even as we watch c dlsvent and these names, whether it's franks, a lot of these businesses are doing well unless they're the ones that appear to still be struggling or plagued by these concerns hanging over the business model. >> they tell us we've had 32 ipos this year.
so far. last year we had 18 for the entire year. in fact, the last -- we got to go back to 2,000 to see 33. number of deals price and a major u.s. market. so it is -- it's been an incredibly busy summer. you can hear it from the cheers right here on the floor. let's get to bonds on the dollar. rick santelli is at the cme. rick? >> hi, carl. you know, it really is pretty amazing at how little yield progress or distance on an absolute basis we've added on the ten year. indeed, most of the yield curve. here we sit. look at the intraday and two-day charts. sit at 260. virtually unchanged on the day. virtually unchanged on the week. if we pick the 20th of june and i will pick that often because that really is where the date where the big selling pressure that moved rates 100 base points somewhat stopped at went into distribution mode with a couple of key days like employment reports causing spikes. here we sit. in this one week that we haven't really gone anywhere, the dollar index has been hurt a bit. if you look at same horizon from
620 where interest rates were distributing price activitactiv well, it's been all downside for the dollar. if you look at a year-to-date chart event versus the euro, euro versus the dollar, dollar versus the yen, same period, 134 on the dollar/yen, that 96 area. potentially on the dollar/yen. and even though abenomics, it isn't going according to plan. i think many are going to continue to monitor that progress. but in the end we did have an option week. 7 $2 in supply. it wasn't pretty but it has found new homes and, in the end, i guess the most important aspect is, we seem very comfortable at a yield of 260. back to you. >> all right, rick santelli. thank you much. we're still keeping an eye on
cvent which looks like it just raised potential range for pope from $39 to $42. that $42 price would represent a doubling up from $21. let's get over to the action on commodi commodity. sharon epperson at the nymex. >> we saw a big run on gold yesterday, kelly, but easing a bit. traders are watch that territory carefully as the volume though is rather thin here for this friday. we are also watching a lot of traders talking about the action in platinum versus gold. we're looking at the premium to platinum over gold at the highest it's been in two years. and it's about $200 right now. more expensive for platinum than it's been in that period of time. and keep in mind as you look at that some traders are saying perhaps now is the time to go long gold and short platinum. we'll see if that trade holds out. in terms of oil prices after being down all week long we're looking at positive territory here in oil and, finally, traders are reacting to that
data coming out of china. yesterday's trade data didn't seem to mean much to a lot of oil traders but today looking at the numbers we're talking about that and the fact that china is getting better, the economy there. and also looking at the data coming out. the latest report from the international energy agency. and they are talking about the global demand being raised in 2014. and also looking at supply levels from libya from iraq perhaps being a bit lower in the coming year. so that's what a lot of traders are talking about this morning and watching here in the oil market. and we'll be talking more about that iea report coming up at 11:00. >> sharon, thank you so much. we are still on ipo watch. a lot more companies set to open for trading, including cloud software provider cvent. the ceo will visit us when we come back. at farmers we make you smarter about insurance, because what you dont know can hurt you. what if you didn't know that it's smart to replace washing-machine hoses every five years? what if you didn't know that you might need extra coverage
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>> ones voicely based on what facebook has done, it has. in terms of the system being test we'd a big widely subscribed, i don't know. i don't know structurally if we've gotten beyond that truly. i do think that the stigma certainly is gone. and, you know, at this point, the imperative to go public certainly exceeds, you know, difficult ni desire to, you know, avoid being the next facebook, so to speak. >> do you think the big test will be hilton which has been written about a lot. and twitter, defile an s1 later this year, next year? >> it seems like the hand has to be forced there, right? you get to a certain size and scale and it actually is more trouble to stay private. so many investors, you have to almost act like a public company anyway. it does seem as if that's going to be the one that could be netscape of this cycle. put it that way. >> interesting. using the jobs act to go public here. if their shares double you know it's going to get a lot of attention from people who might want to be in behind them.
is that something to worry about with the sped up? >> i don't see how less information could be better than more information. to me, i didn't really think it was that cumbersome to have to file the s1 and go through the motions. a quarterly filing. a lot of things were snuck into the jobs act, as we know. maybe we're not investors pr perspective. >> what's the view on it now? it, oh, my god, we really pushed through a big thing here we're going to come to regret? >> i think it was an attempt to do something bipartisan, to do something on jobs at that period of time. i think it was largely a political maneuver. i don't know that we're really seeing a huge bump in companies saying this is, wow, this is going to be the make or break regulation for me in terms of deciding whether or not to go public. you have to remember, even the s.e.c. was actually against changing these regulations to allow a speedier process. so, again, less information is not always a positive. >> i don't think it's created
many jobs among ad agencies focused on hedge funds. that's one of the things. >> still waiting for that. when we come back, we'll drill deeper in one of the big questions of the day. should blackberry go private? keep it right here. oh, he's a fighter alright. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at aflac.com.
pretty flat day on the market so far but a lot of activity on the ipo front t chatting with ron and mike about some macro stuff, too. mainly the fed. we had fisher this week. evans refusing to rule out that september taper. i wonder how important you think that was, ylan? >> you know, i think that he is an important member of the community. certainly well respected. had the evans rule before, sort of saying if we reach 200,000 in jobs per month, start to taper. i am not sold on september taper actually. >> really? >> i think that the data that has come in is efficiently murky. you have the second half of the sequester kicking in in the fall that, you know, it could be hard for them to pull trigger come september. >> you could have said the same thing almost in may and it's clear the fed is quite anxious to exit here. >> i think what the fed wanted to do is make sure that we got qe infinney out of everybody's mind. to persuade people that it's going to end, whether it's in
september, whether it's a little bit later, i do think the direction of surprise obviously would be later. i think there is room in the data do do that. the inflation data in particular. so i feel like once they put the markets on alert that we have to be tuned in to this. that was the first job. and you know, i think they didn't want over confident financial market, yield chasing to be the reason they had to move when the economy wasn't ready for it. i think we've gotten there. >> is it a given that bernanke wants to put this in place before he leaves or would you even think that's open to negotiation? >> i think that's open to neg wags. >> really? >> i'm not saying there won't be a taper this year. bernanke has made a concerted effort to sort of cia the fmoc is a committee, not just me. even when i'm gone you should be able to look at the very clear set of guidelines and rules and look at the data and judge for yourself and make a decision according to how the economy is reporting. >> we had jim stewart on earlier week, would the market feel it when it happened? we he said, i think it will a
nonevent. he doesn't think it's going to be the end all. >> i don't think it's going to be the end all. i definitely think it will be an adjustment period and i think the market will have to make its piece with it. i think, you you know, i've been using the analogy that the market -- investors seem to think that the fed is like atlas holding up the world. when you find out atlas wasn't holding up the world and it doesn't spin out of orbit, you're okay. >> the world has to keep spinning. >> thanks for coming in. great having you. ylan and mike. when we come back, the former ceo of sears canada sounds off on the shake-up of jcpenney and the cvent ceo coming up. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price. and let it do its thing. wow, more fan mail. my uncle wanted to say thanks for idea hub. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a $150 amazon.com gift card. call 1-888-280-0149 now.
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come in now for the best offers of the model year. june wholesale trade inventories droies dropped 0. 2%. last look, half of one percent. now down 0.6%. i don't have the exact numbers. sales is down 3%. that sindeed a big positive. most interesting aspect of this numbers, it's june, the last month of the second quarter. we know that the trade deficit shrunk. it's going to increase the gdp. that's a biggest issue than factoring in the inventories.
what was it? 0.4. sales up 0.4. i thought 3% sounded much too good. back to you. >> all right, rick, thank you so much for that. we are still on ipo watch this hour. six companies going public today. one of those cvent is an event management company and we're going to talk to the ceo coming up right after the stock opens. incredible amount of activity on multiple posts here today. >> lots of cheers. lots of applause. and cvent's case because they could price at a doubling what they could -- oh i should say open than what they priced at. shares of blackberry also spiking on a reuters report saying the company is warming up to the idea of going private. blackberry ceo has said to be interested in privatization in order to fix problems out of the public eye. joining us on the phone is senior tech analyst at jeffries. peter, good morning. >> good morning. >> do you think this is the right strategy for blackberry? >> i think it is. they better do it before the end of the year.
enhance the market, before it gets more competitive and start to burn up. >> before the market gets more competitive, peter. what in particular is coming down the pipeline? >> well, what's happening is that the android players in india and china are releasing absolute hoards of very, very good products. $100 price point product. significant share to low to mid range. putting pressure on everyone. the challenge for blackberry is as time progresses their ability to goes doin and market share loss is specific accelerate. >> okay. so just to reiterate again for anyone having difficulty hearing there, you're saying that they have competitors, asian compo competitors, new operating systems or devices that are coming online. peter, just one second though because we warrant to mention cvent, carl, who just opened for trading. it appears it's opening at $37 after pricing at $21. so a pop of, what is that, about
60% if i'm read that right. >> the range earlier indicated was at $33 to $36. we knew this would be a good story for them but it puts it on top of the indicated range at the open. 80% gain. it wouldn't be the best gain on day one of the year. had the best debut of the year so far. actually doubling going 100% or more. that's going to be one to watch and we'll have the ceo about it in a few minutes. >> picking back up with peter misek here. you were just saying blackberry was facing come pettie competit. what do you do right now? >> split the company in two. take the handset and operating business and flog it to samsung, to microsoft, to whoever you can at the best price you can get. and you go as aggressive as you can in the mobile device management market, which is also competitive. but where gouf you've got a bit of a stronghold and competitive product.
again, you've got to do that quickly because the handset market is going to cause you to burn up significant cash. >> blackberry shares today up 6%. trading still below $10. peter, if they were to pursue that strategy, what kind of value would that unlock, in your view? >> in our view if they were to achieve all that before the end of the year the shares would significantly undervalued. we have a sum of the parts salvage value. call it 19 or 20. significant upside if they could pull this off quickly. >> and if not, if they were to take the company fully private, then what kind of price do you think management would have to give here? >> i think premium of 25% to 30% would be required. that's kind of where dell had to come in. and so if you look at previous privatization programs that's kind of where we would expect that. >> and lastly, you know, there's a lot of people who say and we've been following the jcpenney story at the same time as well that a company needs to go private when it's shrinking,
managing decline out of the public eye. is it true or just true in certain instances? is that certainly the case here with regard to, say, a blackberry? >> well, in a blackberry-specific case the challenge is there's a perception problem. if you can lose market share on the handset side and continue to burn cash, generally become an impression or feared that the other products are impaired. it's much easier to do that in the private than public's eyes. it makes far more sense for them to do that as a separate company with the bad business or the tougher business private. >> all right. the clock is ticking, as you said there. peter misek calling in from jeffries. thank you. drama at blackberry and drama at jcpenney. bill ackman calling for a new ceo to be put in place in the next 30 to 45 days. scott wapner broke that news midday yesterday and he joins us now with the latest.
everybody following you on that story, scott. >> carl, what you have now is one mess, really what erupted yesterday late the day after the news we broke midday and after the close is the full-fledged boardroom brawl. it was ackman's letter here that we told you about yesterday saying the search for a ceo was taking too long. the market was basically speaking and telling jcpenney's board that it had to find somebody soon, that it had to do something to stop this stock from going down. ackman was clearly frustrated that that search process was take toog long. there was the added news that allen questrom was willing to come back as chairman of the board if he supported the new ceo choice. and then after the close, jcpenney's board responded with its own letter firing back at ackman saying that his actions were, in their words, disruptive and counterproductive. also saying that he was int
inaugural li involved. that was clearly alluding to the hiring of ron johnson. and then even howard schultz getting involved. mike ullman happens to serve on the starbucks board. howard schultz rikd ackman saying that making the letter public was, in howard schultz' words, despicable. here you have this boardroom mess. i was able to actually reach mike ullman by phone last night for, you know, a very brief conversation clearly. they have earnings coming up on august 20th, carl. he wasn't really prepared to talk much. but what he did tell me and these were his words, the board has spoken. they've made their statement. i think he also made it quite clear to me that he was comfortable with the comments of the board's letter, firing back at ackman. and i think it's also fair to say that he feels that there's somewhat of a circus that's now developed around jcpenney. i should also say i spoke with a
well-respected person this morning within the retail industry as we start to look at what the prospects really could be for jcpenney to turn that ship around once a new ceo is chosen, however long that takes and whoever that person will be. this again, this well respected person in the retail industry this morning telling me that ron johnson's mistakes probably set jcpenney back three to four years and that mike ullman had no chance once he came in. he was meant to right the ship. he's known as a good leader. then this person went on to say in trying to figure out, you know, what alan questrom's return to this whole drama. he may be considered a retailing legend. he's known as well as a good leader but it's not as xakly like he's a merchandising genius or a king of strategy, either. so you put it all together and you have a mess. >> i agree, scott. i think what's even more interesting is you talk to some of ron johnson's former colleagues at apple, they
believe that he wasn't given enough time, if you had given ron johnson two years he could have truly transformed the company. obviously never know. my question to you is, by going public do you think ackman has gained or lost leverage at this point because the stock is giving back what it got yesterday afternoon. >> it's giving back about half. it's a tough question. you know, it certainly looked like he had some leverage yesterday when we talked to you, carl. you know, right after the halftime show started with this news. now i don't know. you know, the board has come back and struck back at ackman with a pretty harsh letter. although i should say in the letter it's not like the board comes back at ackman and says we're not going to pick a ceo. they were complimentary of ullman but i think everybody acknowledges that they're looking for a ceo. mike ullman was never expected to be the guy. everybody forgets that he had an interim title put on him in the first place. maybe ullman himself thought he was going to be there longer. but clearly wall street almost by the day, if not week, month,
had been voting that something needs to happen here, that maybe this new strategy and some of the new innovations, whether it be home or joe fresh or whatever else, that the company was trying, just simply wasn't working. >> well, whenever you're on our air, i think people are like, okay, what's he got. we'll talk to you soon. >> all right, carl, thanks. >> scott wapner covering jcpenney. let's bring in mark cohen, professor of marketing at columbia university. and ken, a senior partner with booze and company. it's great to have you both. what a story. mark, let's begin with you. you know when you're riding a bicycle and you go too far to the left and then to the right, eventually you're probably going to crash. how does this all stabilize? >> well, look, it's fair to say and i don't mean to make light of the last 24 hours that the headlines that describe what's gone on at the board at jcpenney sound more like the "housewives of new jersey" than the behavior
of a group of people charged with managing the affairs of a multibillion dollar corporation. this is really unseenly. >> guys, how much is a new ceo really pancea for what's going on at jcpenney? it's been going on for a decade, maybe longer. how much will a new ceo actually make a dirchs in a market segment that has been contracting the loser customers that is almost like in the middle of the road? >> i think the focus on a single individual is somewhat unwarranted here. clearly the company has to stop foreign policy bleeding that has gone on for the last two years. that's an imperative. while at the same time the company has to find a way to get back on its feet and become successful in a very dynamic and challenging environment. the fact is the company wasn't doing all that well when mike
ullman was pushed out of the seat. some members of the board seem to have thought the company was doing fine but i think it's fair to say that's not the case. the johnson episode is nothing short of catastrophic. had he stayed in the job for any other -- any period of time, the company would invariably have been forced into restructure and possibly into liquidation. now the company has to face the reality of getting back into the customer's view, managing its cash, bringing its cash flow back to some viable position for the future. >> right. ken, you know, given all of that, if you were called into this company right now, what would you advice be? >> well, look, i think the company needs two parallel strategies. one to get back into some strategic path that gets it out
of the terrible bind that it's in. at the same time, positioning itself for the future. jcpenney is a general merchandise player in the value space, which is about as competitive as there is in the retail business. >> sure. it's just not going to make it unless it makes bull moves right now. >> ken, i'm curious what your view is as well. what you you say if you're called in? >> well, first of all, i agree with scott, that we've got a real governance mess on our hands peer. to be fair, i think it's easy or discordant when the company is not doing well and easy to be sweetness and light when the company is doing well. i give that a bit of a grin ain salt. in addition to a governance mess they've also got a strategic mess and leadership mess on their hands to state the obvious. they've got what i would call the best buy problem which is, best buy has apple as a high end
electronics rail retailor above it and it's got walmart and amazon below it. and it's squeezed. people are asking themselves why do we need best buy. well, you could say the same thing about jcpenney. they've got nordstrom and neiman-marcus and the like sit ag above them and they've got kohl's and walmart and target sitting below them. >> ken, the problems are easily -- you could list them all. but if booze got this account, in a word or two, what would be the bullet points about what to do about it? >> yeah, well, there's two strains of what you would have to do. one is you would have to obviously do the things necessary to survive. and i think that entails two things. one is you've got to edit the business to very surgically to carve out the stuff that's not making money so that, as mark says, you can get into a better cash position. and you need to make a mends with your core customers.
let's face it, they angered their core customers. that's the immediate fix. but there's a longer-term fix here, too. they need to step back and ask themselves two questions. one is, what are we good at? what can we do better than macy's or any of the other choices that our consumers have. and how can we build on that in order to create an identity for us. i mean, like best buy, no one knows who jcpenney's is anymore. >> that's going to be their challenge. mark and ken on this friday morning, appreciate it. let's get to bertha coombs for more on jpmorgan. this one goes back to last spring. >> yeah. this is one of the newer ones. a lot of the mbs snuff is legacied. this is under jamie dimon's watch as part of the settlement requirement the fcc wants jpmorgan to admit wrongdoing of handling of last year's $6 billion london whale trading losses. sources familiar with the negotiations say a settlement
could come as early as this fall. it would not include charges against executive or individuals such as the key trader involved in that derivative bet that went wrong. in order to secure the admission of wrong doing regulators will likely charge the banking giant with failure to supervise its employees properly. for the s.e.c., the goal is to set a precedent. new s.e.c. chairman mary j.o. white has advocated forgetting firms to admit misconduct ending the traditional practice of big money settlements without having to acknowledge guilt. for jpmorgan a failure to supposed viz charge would be a lot easier to admit. in his senate testimony jp momon ceo jamie dimon made clear at a conference if bank's goal was to blunt any perception of fraud. >> there was no hiding. there was no line. there was no bull [ bleep ], period. >> despite the apparent progress with the fcc, the fbi and u.s.
prosecutors are investigating whether individual traders new the losses would be more than $2 billion. the estimate that jpmorgan initially gave investors back in may 2012. "the new york times" reports investigators have uncovered internal e-mails and phone records which allude to as such and this those enraged jamie dimon when he was confronted with them. kelly? >> all right, bertha with the detail on that london whale trade. i guess the ahab for jpmorgan. cvent, stock is trading sharply higher. the founder and ceo will join us live and tell us how to go to a publicly listed name. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me.
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cvent surging this morning. for an exclusive interview, founder of cvent is joining us at post nine. nice. >> thank you. >> what was the first indication to you, when we got the indication of $33, $36, when did you know? >> you never know until it finally opens. we're super excited about today. we've been working for 14 years to transform the industry and it's great to have a great opening day. >> as ceos go, this was a near death experience, right? >> yes. >> living with your parents. keeping the company to survive. now you're public. in part because of the jobs act. and there's a lot of discussion about what to what degree that has been an aid. could you have the done this
without that? >> the jobs act was very supportive. very helpful. as a smaller company trying to build, it's great to have the support of the new regulations that make it easier to you don't focus on the expenses but focus on raising money to keep building your business. >> do you worry that it blinds investors to some level of transparency when it comes do the internals? >> i don't think so at all because you still have to give your financials for several years and i think there's still tons of transparency that goes on. i don't think so at all. i think action opportunity for smaller companies who don't have to go through all the regulatory bureaucracy, frankly, so they can focus on building their business and adding value to their companies. >> what are the advantages for you to be a publicly listed company? where do you want the company to be in three to five years? >> we obviously thought long and hard art going public but it made a lot of sense for us because we see a big opportunity in the meetings and events space and green opportunity in core
business, international is booming for the meeting and events space, $565 billion a year is spent globally. to kind of penetrate the global market there's a lot of changes going on with mobile. all attendees that go to events are mobile professionals. they're kind of going outside the front door of the meeting organizers with pitchforks and torch essaying we need mobile apps and mobile devices to make it easier. >> you guys can do that. >> absolutely. cvent has been doing that for a while and i think it's a big opportunity to continue growing. >> talk a little bint about your acquisition strategy. we saw on your ipo filing ticker, earlier this year. what do you see going forward in terms of what companies you guys are looking at and how you're expecting to grow? >> we've been organ cically gro for 13 years. we did it because we saw a big opportunity in the mobile space which we bought two companies in. and we also bought a company, the ticketing space, as you mentioned, to help us do more consumer type events which we
call b to b to c. we've been historically a b to b company helping the mid level associations and corporations and large ones but we think the consumer side is also exciting that we can grow and leverage our technology and expertise. >> the prospectus still estimates net losses. whun do you make money? >> we've been cash flow positive for a long time. you know, as a company we've always been disciplined and good stewards of money. from a cash flow perspective we've been cash flow positive for ten straight years. we plan to continue to do that. and i think that as a company we're going to find opportunities to continue to invest. and i think we feel very excited about what the future holds because we know that as cvent transforms the meetings and events industry we'll be there as the market continues to grow and i think that our financials will reflect that. >> you must get into some great parties. >> yeah. >> bring us along next time. i see you brought a lot of friends today, too, reggie. thank you for coming in. >> thank you for having me. >> cvent now public today. up 78%. >> not too shabby.
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the well publicized feud between cbs and time warner, millions of viewers are unable to watch their favorite shows. turns out they might need the broadcasters anymore to do that. julia boorstin is live in lar with more. >> good morning. with the pga championship and nfl games this weekend the pressure is on for cbs and time warner cable to strike a deal and end the blackout for more than 3 million subscribers in new york, los angeles, and dallas and other major cities. plus, all of time warner cable's showtime subscribers. whether you've lost tv or just frustrate bid the high cost of cable bundles, there are options. there's the antenna, there's streaming video services aereo and netflix, hulu and amazon prime and gadgets to stream internet content right to your flat screen. now, if you're looking for live
sports, you can watch this weekend's golf tournament at pga.com or you can get all live broadcast tv on mobile devices via aereo, which despite major lawsuits continues to roll out. just yesterday it announced it's launching in miami, houston, and dallas in september. if you're not looking for live sports, netflix, hulu plus and amazon prime give access to virtually infin nate television shows and movies for less than $10 a month on apps which can be viewed on your tv screen even if you don't have the newest internet connected sets. newly launched chrome cast which is google's $35 dongle, in $9 apple tv allow consumers to access internet content from whatever screen they want. technology, which could drive big changes. 7% of paid tv subscribers say they're, quote, highly likely to cancel their subscriptions in the next six months. those with internet connected tvs are more than twice as
likely as those whose tvs are not connected to the, web. this according to a new study by the diffusion group. the long likely the battle lasts the more subscribers are to adopt these alternatives. >> that was an eye-opening study. julia boorstin. it's back to the '90s for priceline, the stock up 60% this year. beating the record of $990 back in '99. pulled back just a touch this morning. question is, is it on the way to 1,000? we'll talk about it when "squawk on the street" comes back. before their gift helped preserve the point... before a credit solution was used to expand their business... before trusts were created for their grandkids' educations... they chose a partner to help manage their wealth... one whose insights, solutions, and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust.
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if you thought you had heard the last from bill ackman, apparently not. scott? >> thanks so much. yet another letter from bill ackman to the board of jcpenney in which mr. ackman says he is calling for a board meeting to be held as soon as possible. he also is now formally asking for the chairman of jcpenney's board, that being mr. tom to be replaced by alan questrom. alan questrom said he was willing to come back as chairman of the board assuming he could support whoever the ceo choice could be and also that there was no hostile environment that was taking place. i can tell you also that bill ackman is also trying to, i guess, strike a bit of a conciliatory tone in all of this
and get it back to the matter of hand. that being trying to fix jcpenney. in the letter he says, to the board, if we join arms and this conflict -- and this conflict behind us, reach out to alan as a full board and commit to move forward with an accelerated search process, i believe alan would come on board to help us right away. so bill ackman wants a board meeting soons as soon as possible. he wants alan questrom to replace tom as chairman of the board. other item, bill ackman saying in the letter, i'm concerned a small subset of the board is negotiating and speaking on behalf of the full board and that the rest of the board has not been properly informed and is not been given an opportunity to express its views. i think it's also clear from this letter that bill ackman has taken issue with some of the executive moves that have been made in the last several weeks and months. there was a new marketing person who was recently hired, a whom hofs at kraft who had no retail experience. bill ackman says of that,
imagine my surprise when i learned of ms. berman's hiring from a press release. so he has been somewhat out of the loop, as he points out, as chairman of the finance committee on the board of directors that he didn't even know that they were hiring a new marketing person, that a small segment of the board has been operating on its own and hasn't given the full board an opportunity to weigh in on any of these decisions. but after there was a rather hostile tone to this whole mess by, say, 8:00 last night eastern time, at least in the letter today, yet the last one that bill ackman says he hopes he has to release to the press, he says if we join arms and put this conflict behind us, reach out to alan as a full board and commit to move forward with an accelerated search, he believes that alan will come back. so that is the very latest development, carl, in this ongoing story. we've looked at the stock up about 7% yesterday on our report of the letter. and mr. questrom's willingness to come back and after this whole thing got into a
full-fledged brawl late in the day, the stock has since given back half of those gains. i'm sure there will be more developments today and we'll have them. >> i do not doubt that whatsoever, scott. we'll come back to you soon. thanks a lot. scott wapner at headquarters. shares of priceline rising. i want to bring in two analysts on this one. fascinating story. they both raise their targets. mark, you know the managing director, lead internet analyst, target is 11.10. and tom white, analyst with mckroerry research. happy friday to both of you. people are calling it the ultimate comeback stock but i need to hear the valuation put into some context and why you would want to get at these levels. >> of the large cap internet stocks this arguably has the most attractive valuation. this is -- we showed this in our note this morning. this company is glow growing its top line. they've done it consistently.
and they've got new growth drivers. they're probably going to grow the bottom line close to 30%. you can buy this at a high teens multiple. it's one of the most attractive assets in the internet space. >> tom, you agree? >> yeah, i can't say i disagree. another thing that needs to be taken into consideration in price line, you've got one of the most consistently executed management teams in the internet sector. when we look at our forward eps estimates for priceline over the next few years which we think they can grow comfortably at a low 20% kager, you know, we think those are very reasonable estimates and, if anything, see po tetential for upside particularly as they execute in the new bigger new geographies they're looking at, such as asia pacific and latin america. >> anyone who has looked at the quarter, look at the international bookings did in the quarter, what gross bookings did, what margins did. they're going to have to talk
the street into understanding the numbers are going to have to come down, or are they, tom? >> well, we don't think that the numbers necessarily will come down in the near term. clearly this is a very large company that is comping against increasingly large growth rates. so they will be inevitable deceleration on the unit growth rates. we think that's largely reflected in street numbers. i think the bigger area of debate will be around margins, particularly here in the near to intermediate term. this is a company again that has big, big long-term investment opportunities in front of it. we think the company's making the right decision by making incremental investments in some of these newer markets. but that will put pressure over ebitda over the next year or so and that will be a bigger area of debate. >> given that, i'm curious as well what it was about the latest quarter that made these price targets seem more achievable in the 1,000 range, makes people see their earnings
power as increasing for a much longer period of time. what did you see in there that you liked or that changed the story and made it that much more attractive? >> i guess just think this is a very consistent high growth story. the reasons are three or four fold. their biggest market is europe. europeans love to travel. the yooirp peen market has been weak for several years so that's going to get stronger. that's the reason why they may be sustainable. the company is making a bigger push into two very early stage markets. latin america and asia pacific. they're now in a position to gain market share in the u.s. growth rates are two times that of expedia now. huge opportunity for them. only the quarter of a size of expedia. new market for them really. then finally, fourth, to make a big push into a new category for them. international markets is rental carses and selling rental cars at a two-year high growth rate. 46% year over year. i know that growth rates are impressive to date but i think they're good arguments for why they are sustainable longer than the market realizes.
>> you mentioned that that market, i believe the hotel bookings and car rentals were what helped propel their earnings to such high levels. how big of a sector do you think those two pieces will be going forward for the company? >> the bread and butter for this company for the last five years has been hotels. if you're going to sell online travel, don't sell airline tickets. sell hotels. 15% commission. that's what priceline has done. particularly in international markets where it's highly fragmented, limited chain presence. rental cars are smaller, a 50th or a quarter of a size of hotels. it is greenfield opportunity for priceline. >> mark, tom, interesting story. we're watching to see if it gets to that $1,000 level. thanks, guys. >> thanks, carl. despite priceline moving higher, markets are trading lower. are investors get moerg concerned about the timing of the fed's, t word, taper. john, good morning. >> good morning, kelly.
thanks for having me on. >> great to have you. you know, look, a lot of people trying to say we shouldn't be focusing that much on the taper. other things matter, too, here. unfortunately as your point that, look, the timing of it matters. it's going to have an impact on equities and maybe that's why we're seeing some weakness here? >> yeah, that could be. you know, it's hard to tie weakness and equities to any one thing because markets are such a behavioral system. you know, certainly the fed on this track of tapering, it's going to have to end at some point. i think people are concerned that we're closer to that point today than we were certainly a couple of years ago. although the economy itself wasn't showing signs of strength. >> it's interesting because you make the point that one of the reasons why we might see high valuations for these companies, whether it's tesla, biotech stocks, is that investors don't know how to price things right now. they're confused by this low rate environment that we still have or confused by how cheap
things are in the credit space. what's your advice here? >> certainly we are seeing signs of speculation in the markets. we also see a high level of short termism, what we call in the business where basically there's a short-term focus. a lot of people are putting their money to work based on trades as opposed to long-term investments. so in that process we see investments looking at what -- people looking at what they believe is not risky and allocating all of their money to that. but in that process, things they view as not being risky get bid up to prices that make them risky inherently. conversely -- go ahead. >> i was just going to say things you wouldn't necessarily think of. talking about the dividend namgs, high yielding stocks. again, the traditionally safe haven plays that are looking expensive. >> yeah, that's exactly it. i think there's been a huge migration of capital into dividend payers here. and as run the price up to levels that make them more risky
in this environment, especially at a time when we may be looking at the beginning of a normalization in rates. we never really know what the fed is going to do. we know how the fed thinks. but, yes, there are pockets of speculation. there are areas that have been run up, in my opinion. dividend players being one of them. you know, indexing. indexing has become really popular over the last several years. and indexing to an extent depends on other people continuing to index in order for it to work. i made the case in the latest commentary that i wrote that the process of indexing creates some valuation distortion among -- between index constituents and nonconstituents. so we prefer to look at, you know, the nonconstituents for where the value is. you know, for example, china stocks right now. they're trading eight times forward earnings. they look attractive at that level. chinese stocks have been written off for dead. we tend to gravitate to those
areas that other investors are ignoring for behavioral reasons as opposed to economic reasons. >> sure. >> i think that's where the opportunity is. >> we talked a little earlier about how the markets will react when the tapering comes. do you think that there will be, you know, a big sell-off when the fed actually makes a move or has the talk of the tapering prepared the markets enough that it will just be a non-event? >> boy, that's a good question. you know, it's really hard to say for the market as a whole. you know, if i had to guess, it's just a guess, i believe that there's going to be a pick-up in volatility and maybe headwinds for the market as the tapering becomes a reality because people are going to start a look at how far is this going to go rk how are we going to discount -- how are we going to value assets, you know, in a lower rate, a higher cost of capital paradigm for lack of a better word. you know, there's some uncertainty there. as we know, markets don't like uncertainty and, you know, they
will move to others a assets not knowing what other people are going to do. >> indexing depends on other people indexing in order to work. i'm going to think about that one over the weekend, john. >> thank you, kelly. thanks for having me. >> thanks for having me. >> she really are be thinking about it over the weekend. trust me. when we come back, why climate change could be facing the iceberg on your sandwich. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ easy-to-use platform. no, thank you. we know you're always looking for the best fill price.
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welcome back to "squawk on the street." i'm josh lipton. we're watching monster beverage in the red yesterday. reporting that disappointing quarterly profit. analysts i spoke with talking about weather, continued bad press. but in the green this morning, actually trading at levels it has not seen since august 2012. analysts at jpmorgan are out with a note, take their price target on this one from 52 to 70 saying with easier comparisons in the back half of the year, they do expect top line growth
to reaccelerate from here. that stock up more than 3% right now. carl, back to you. >> josh, thanks so much for that. let's get to the cme group. rick santelli with the santelli exchange. hey, rick. >> hi, carl. you know, if you like really big numbers, i think you're going have some fun. but if you don't like debt you're not. 1,0 1,00 1,000,000,000 yen. that's so many zeros i would have had to turn my wooind white sounding board sideways. 10 1/2 trillion. what is it? it's the record japanese national debt racked up currently. it's well over 200% of gdp. i don't know. i believe reuters put a sentence in one of their articles covering this that it's more than the combined debt of the uk, france, and germany. i really haven't heard enough about it, to be frank with you.
i know that it's really fun to have all of these conversations about to taper or not to taper. but to me, i think this is a story to reckon with because we're all operating from the same model. okay. so they're borrowing but maybe it's a saving grace that a good significant portion of that that is owned within japan. i don't think that's necessarily a good idea to dismiss it, that's for sure. but, you know, they're pushing infrastructure but they're also going to be pushing taxes. it seems like the timeline for abenomics can is going to see significant tax increases. i don't know if this is a great formula. they're not a reserve currency. if you look at the nikkei, it doesn't look like the s&p, it's having a bit of a rough time. another area, let's talk china. other day the big, big story and it should have been were the import/export numbers of china. i do believe their import numbers were close to 11%.
10.9, to be exact. and if you just shift to iron/ore. iron/ore imports were 73 million metric tons. let's not get lost in the weeds in the number. it's just a very, very, very big number. and i know so many people that don't trust these numbers, but that's the story for a different day. but the issue is i remember back when the chinese wanted everything from rare earth minerals to copper, and they started using various loan structures to use the copper as collateral. in the end, if you're not building important things that help society be more productive, it's just buying time. their gdp has remained under 7.75% for several quarters. this is a big deal. carl, kelly, back to you. >> it's a great point, rick. thank you very much, sir. now that blt you love to eat could be getting a lot more expensive very soon. don't go blaming the bacon for
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your blt is about to get very pricey but not for the reason you'd think. it's not the bacon's fault. it's the veggie that is could be the culprit this name. jane, it's not even, what, 8:00 a.m. there for you and you're on your second blt? >> you know what? i could eat them around the clock. it is always time for ab blt. i'm at the grill at a golf course. the lettuce has skyrocketed the most. some restaurants have stopped using it as iceberg prices come to a head. >> we're in a pretty much unprecedented type of a situation here. we've had an extremely high market for the last six weeks. >> this time of year we should be rolling in lettuce but weather issues from california to maine have impacted the crop and not just for lettuce. look at the veggie prices compared to a year ago. iceberg more than doubling.
now you have a good excuse not to eat broccoli, spinach, asparagus, or cauliflower. the high prices could last as long as a month. >> our price level this time of the year last year was probably in the $9 to $11 range and currently we're $23.50 to $25 on that same box of lettuce. >> that's great if you've got lettuce to sell. that is a fantastic price for you. the problem is if you don't have it. one thing, celery prices, the only thing i could find that was down, down 13%. later on "street signs," we're going to go over every disturbing aspect of every ingredient in this sandwich. it won't be this sandwich because by then i'll be on my third blt. >> i don't doubt that at all, jane. we'll see new a few minutes. jane wells eating on camera, as usual. when we come back, how ocean 16 hit the jackpot, the story behind the jersey crew that got all of those powerball winnings.
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the powerball pie. they work at the county vehicle maintenance department in new jersey. could this story get any better. it was purchased as part of the office lottery pool. that's how you want to win, with your friends, with your co-workers, especially if you actually have a job where you're not behind some cushy desk. >> their employer is going to have a problem now. you have 16 people who may never show up for work again. >> they say they're going to stay but the first time your boss says, can you do this for me, there's a temptation to say i'll see you later. >> i don't know if i want to win in a pool. i think i want to win by myself. >> greed is good i guess. >> you cover a lot of things for "the washington post." a lot of people are leaving the committee. >> i think there's been a lot of focus on who is going to be the next fed chair. but you have to remember that the fed overall could look very, very different next year. in addition, you have sarah ras
kin who is going to be living, elizabeth duke who is going to be living, janet yellen who may not be there, and you have ben bernanke who is also not going to be there. that's potentially six people who are going to be leaving the committee. that's half of the members and that could really make a difference in sort of how they interpret the data and how they end up executing the exit strategy. >> pretty much just leaves the last woman from the kansas city fed on. >> here is what you missed earlier on. >> welcome to "squawk on the street." here is what's happened so far. >> questioning the involvement in jcpenney at any level if true and real, would interpreted as a clear, clear positive. >> when you look at refinancing, the middle class, someone with $100,000 or $200,000 loans, many have not been able to take
advantage. >> actually feel like you have to position blackberry as kind of a niche cult product. it's not -- i don't know if there's room for four big mass market smartphonemakers. >> the merchandise is inprot for their core customer, and that's the customer they have to get back. i would not be surprised to see that liquidated throughout the next few months and reset to the way it was during the old jcpenney. >> there's the opening bell. >> it appears as if it's opening at $37 after pricing at $21. >> you feel very excited about what the future holds because we know that at cvent transforms the meetings and event industry, we'll be there as the market continues to grow, and i think that our financials will reflect that. >> mr. ackman says he's calling for a board meeting to be held as soon as possible. >> for the next three years, they're probably going to grow the bottom line close to 30%.
you can buy this at a high teens multiple. it's one of the most attractive assets in the internet space. good friday morning. we're live here at post 9 at the new york stock exchange with the dow having yet another tough day. remember, we had three in a row, managed to get one day up. we avoided that four-day losing streak, but we're back down now 90 points. that's the lows of the session as we once again talk about triple digit potentially losses on the dow. s&p is back down to that level we keep revisiting at 1690. huge move for priceline. the stock rallying after the travel company reported a 24% increase in earnings that beat expectations, and then this morning they open at an all-time high passing the previous record of $990 back all the way in 1999. shares of deere are falling this morning. ubs downgrading the company to sell from neutral. not the first sell we've seen on deere. lower corn prices are pressuring demand for agricultural equipment.
blackberry as a private company? the ceo and the company's board might consider doing just that. we'll tell you if it could happen and what it means for blackber blackberry. and the smartphone wars are just heating up. a major ruling expected today that could ban the sale of some samsung devices in the u.s. find out what that could mean for samsung, blackberry, apple, and host of others. plus, would you like to know how your local government is spending your money? well, a new bill in ohio is trying to do just that, putting the entire state checkbook online. ohio's treasurer will join us to explain. first, we bring you new developments in the jcpenney saga. cnbc's scott wapner confirming the retailer's largest shareholder has sent a second letter calling for the chairman to be replaced and asking for the board to meet as soon as possible. let's bring in brian nagel who has a buy on jcpenney with a $15 price target. good morning. >> good morning. just one thing i want to correct, we have a perform rating on jcpenney with a $15 price target. >> okay. so you've seen now this back and
forth, the latest letter ackman has sent to the board, what do you make of it? >> if i take a step back and consider the news of last 24 hours, i think what it shows, and something we've been talking a lot with our clients, is that jcpenney right now is in a very difficult strategic position. i think what's happened is the company is still reeling from some of the mistakes that the former management team made as they aggressively tried to reposition jcpenney. now they're really fighting to -- they've stabilized their balance sheet but they're fighting to get customer traffic back to the stores. i think -- >> go ahead. >> i think the back and forth amongst the board members is very reflective of the difficult position it's in. >> the question is whether the ceo will make a difference here. is it going to matter who they pick? is the whole exercise just a giant distraction going back to the selection of ron johnson initially at the beginning of last year? >> well, look, i think -- it's very, very important the decision that jcpenney ultimately makes of who runs this company.
>> and sorry to interrupt you, scott wapner will join us with more breaking news on this story. >> thanks so much. according to a source close to jcpenney, ackman's facts laid out in his letters over the past couple days are incorrect according to the source. directors as a group have thoroughly discussed the topics laid out in mr. ackman's letter according to this person. there's been a thought, you know, at least the case being made in the letter here is that either the chairman of the board has gone rogue or a very small number of board members, a small group of directors have gotten together to make some of the decisions that have been made. i'm told from a source, again, saying that that is simply untrue, that the directors have thoroughly discussed the topics laid out in the letter, and that the board's release yesterday reflects that decision. that's what i have now. i expect to keep reporting this and hopefully have some more and when i do, you guys will be the
first to know. >> a busy morning for you, scott. thanks very much for that. jcpenney shares slipping further on that report down almost 6%. they basically come full circle since yesterday's rally on the news there might be a new ceo. brian, back to you. what do you make of what scott has just told us? >> well, look, i think what it shows is -- i think -- let me put it this way. i think the biggest risk for jcpenney is the view their vendors may have of this. if the vendors are saying here is a company with a lot of infighting, that's going to potentially hurt the confidence these vendors have in the company. right now at this stage with the company still losing money significantly, to keep the vendors happy is very, very important. so to me i think jcpenney needs to quickly get one voice and one strategic direction to comfort these vendors. >> i'm seeing things on twitter. obviously this is descending into a bit of comedy here. jcpenneyless is one name people are giving them. we know that's not true. we know they have some cash.
but as someone who arguably has tended to look at penney with the glass half full, how worried are you now about cash levels? >> i think right now -- whenever i answer that question, it's always a matter of time. right now cash seems fine. you know, the company hasn't reported its second quarter results. they'll do that in the next few weeks. but given the loan thern able to secure a few months ago and my analysis of cash burn, i think right now they're fine. no question if jcpenney continues along this route, there will be a cash problem at some point. but again, the company has some time right now. >> yeah. i guess people will argue, first, they said they'd never touch the revolver and then they did, and they said they'd have this much cash. according to some estimates, they don't. i wonder if that story is darker than we think. >> right now if you want to look at con ses shus estimates, street estimates, i think the street estimates are still too high for cash. our numbers -- my numbers at
oppenheimer are much lower. i think right now there's not a real cash -- as far as i can tell there's not immediately a cash problem. >> okay, brian nagel joining us this morning. thanks very much. as we keep an eye on the market. the dow is now down triple digits. we'll try not to take it personally because it keeps happening. >> we try to add the caveat that we are in august and it's going to be volatile, but this would be the first i think down week in seven perhaps. >> wow. >> we've had a pretty good run here, but the dow is down 107 points. if the drama at jcpenney is not enough for you, blackberry is now reportedly considering the possibility of going private. could this be the solution to blackberry's problems? marshall is the sharon and ceo of sonnenshine partners. and bill is a research analyst. good morning to both of you. marshall, it's great to have your guidance on this. how seriously do you think they're taking this? >> first of all, i read the news and it must be a slow news day in the news cycle because the
truth is i don't think there really is any news here. the company has said nothing. its sources say and reportedly and so forth the reality is any company can say we're open or we're mulling or thinking about, but there is no deal here nor would i expect there to be a deal here right now at this moment in time. it's possible a strategic might come in, we'd love to try to fix this thing. that's possible. a samsung or somebody like that. private equity for a company right now that's trading at 20 cents on the dollar because its sales have gone from close to 20 bltz to close to $10 billion and its still losing money and its new ceo who is a capable guy and this board haven't yet figured it out, i think that's unlikely. it feels like a slow news day stretch to me. >> interesting. that's a good way to look at it. bill, if what reuters is reporting is true and there is really a change in tone on the board, what do you make of it
given that heinz has heretofore ruled out certain things, right? licensing -- it was like trying drag them into that possibility. do you think he's truly turned? >> well, as marshall says, you know, absent confirmation, we have to regard it at best as a trial balloon, but the fundamental issue then is does this address blackberry's problems in the marketplace. it's addressing maybe the perception they want to avoid in the market so then work on their issues behind the curtain of private ownership, but in the marketplace, as marshall mentioned, they're struggling significantly in their biggest market such as the united states where even with their new products, they're consistently only getting, say, 1% to 2% market share. that's a problem, and as we look at our enterprise clients, right, who are still the biggest market for blackberry in a lot of the developed markets,
blackberry is fading from the consideration. >> i think that's right. >> and that continues to happen. that's going to be the issue they need to address, not whether they can work on their finances. >> marshall, i hear you jumping in. do you see an existential threat to the brand? >> well, i think the brand is in a long systemic, slow, continuing decline, although i think that mr. heins is starting to do some useful things in creating some stability at the bottom, but they're still trading at the bottom. with a little increase in the stock, they're a $10 stock, 52 week range is $10 to $18. i still have a blackberry. i actually like the product, but people look at me with my blackberry. i also have an iphone. i have both. people look at me with my blackberry and they say you have a nikon camera with film. i think they have a ways to go. i think it's a good brand and it was a good system. i think the apple insurticursio
simply a tsunami. >> marshall sonnenshine and bill. i pulled out my plaque berry yesterday and the guy behind me said is that a blackberry spike lee said he likes the blackberry for e-mail. . meantime, strong words from the iea. a new report says that u.s. shale oil threatens to derail the future of opec. sharon epperson is live at the nymex with more. >> a lot of traders focusing on the headline from the international energy agency in terms of what they're looking for for overall global supply and demand and what they're saying in terms of global oil demand is they do expect it to accelerate in 2014, although their forecast is a little less than it was in the previous month's report. they're looking for an increase of 1.1 million barrels per day bring the total consumption to
about 92 million barrels per day next year. despite the fact they're seeing an increase in comp sumption, supplies may may outpace demand. if you look at where nonopec supplies will stand, nearly 55 million barrels per day, north north korea contributes about 40% of the growth that we're seeing there according to the international energy agency, and they're attributing most of that growth to canada. but keep in mind as we look at the rise in north american supplies, there's a lot of question about what this will mean for opec. we have seen a number of disruptions to opec supply recently, namely in libya and iraq, and there is some concern. opec even saying it in their own report about the supply coming from there. we have alo lot more about this story on the website, cnbc.com. >> it could have big impact on opec's future. top ceos like larry elson
are clearly the highest paid chiefs in the country. he actually takes home a lot less than he's worth. first, rick santelli, what are you keeping an eye on this morning. >> i'm keeping an eye on my blackberry. all the e-mails. if you go another thousand, thousand, it's a quintillion. these are big numbers. we'll have ira harris in ten minutes and we're not going to just talk about the big numbers. we're going to talk about the japanese economy and what abenomics may mean over the next several quarters. you'll want to hear this. before global opportunities were part of their investment strategy...
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down triple digits for the dow. the index is below 15,400. the s&p off by six points. the nasdaq lower as well. home depot one name in particular responsible for the dow doing worse. ask why we might have taken a leg lower in the last 30, 45 minutes. not necessarily clear, but we've seen this pattern before during the last couple trading sessions. we move lower, perhaps has something to do with pressure going into the european close. yesterday we closed a little higher. we'll see what happens today. >> art cashin just walked by and told us some traders attributing
the fall to the evacuation of the eiffel tower. now given the all-clear. larry ellison may be one of the highest paid in the country, but he takes in a lot less than you might think. knowing that, what is the best industry to be in if you're a ceo. mary thompson has more on that back at hq. >> there can be a big difference between what the proxy says the ceo is paid and what the pay is worth a year or two down the road. driving the difference, options and stock grants that rise and fall. a lot of ceo's pay in their portfolio rather than their pocket, this is referred to as realizable rather than actual pay. crunching the numbers to see which ceo had the greatest realizable pay for the last three years at year answered and how much more or less it is than the sum of the target pay in the proxy. topping the list, the ceo of lion dell bazell. $103 million, tripling to $361
million re-eleflecting the rall the chemical company's stock. number two, les moonves. his target pay worth $326 million. followed by simon properties david simon whose target pay of $355 million is now valued at $234 million. the top paid ceo vfrom viacom. and bob iger coming in at number five. media is where the money is. five of the ten highest paid ceos in the business including number eight, brian roberts, ceo of cnbc's parent company comcast, his three-year pay worth $107 million and discovery's david zas lav at $102 million. larry ellison, he's number 11 on
this one. his realizable pay of $101 million is only 42% of his target pay. not sure many people would turn up their nose at that realizable pay though. >> only 42%. that's a big figure. mary thompson, thanks very much. an international court will decide whether or not to ban some samsung devices on sale across the u.s. we'll tell you what it means for samsung and apple when we come back. like carpools... polly wants to know if we can pick her up. yeah, we can make room. yeah. [ male announcer ] ...office space. yes, we're loving this communal seating. it's great. [ male announcer ] the best thing to share? a data plan. at&t mobile share for business. one bucket of data for everyone on the plan, unlimited talk and text on smart phones. now, everyone's in the spirit of sharing. hey, can i borrow your boat this weekend? no. [ male announcer ] share more. save more. at&t mobile share for business. ♪
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take a look at the s&p 500 heat map. we have a lot of red across that board. we're down half of 1% for that index. we're below 1690 as we sell off by 125 points on the dow, which is sitting at 15,373. so after a week where this time last week we were hitting new record highs, we have certainly come a step back. >> not only are we at the lowest levels for the dow since july
10th, this is the second worst week for the dow. >> tells you what kind of year it's been. >> meantime, a big decision is expected to come down today in the patent infringement case between apple and samsung. if samsung is found guilty of infringing a patent, the court could ban the sale of some of its devices in the u.s. for more insight, brian cooley editor-at-large ofcnet.com and ena freed, editor. how much is on the line and are we more worried about apple products being banned or samsung products? >> i think what's going on here is the phones at risk for samsung are not hot phones. s in not tthis is not the galax. we're not worried about this being a current product line hit
to samsung. >> that's true. a lot of this involves older products. what's on the line? >> yeah. i mean, this is one of many battles taking place across the globe between these two companies. they tend to only be able to fight over older products. so damages tend to be more impactful than the bans but the bans still are impactful. some of the phones are still being sold even if they're not the latest phones. by the time a court renders a decision, often times they've moved on to whatever the next thing is. >> how much were you thrown for a loop ina by the obama administration's veto of that itc ruling? >> there were a few hints that this might be coming. it's the first time in decades that the administration has actually vetoed an itc action. at the same time, the u.s. government, lots of folks are increasingly frustrated with the degree to which companies are using what are known as standards essential patents. basically the patents needed to
do wi-fi or something that everyone does and trying to stop products. those patents are supposed to be licensed on fair and reasonable basis, and at least the other side claims here, apple, that they would take a license if they were offered it under the fair and reasonable terms that they're supposed to be. samsung, by contrast -- >> go ahead. >> samsung, by contrast, is being sued over design patents, the things ma make the iphone and the ipad look the way they do. so these are different kinds of patience this week than the ones that the obama administration vetoed last week. >> yeah, exactly, brian. that's what i was going to ask is what kind of pal thl that ca over these decisions. the first time they've ruled in 25 years. brian? >> an unusual situation there for that overruling. a lot of politics going on and a lot of sensitivities about two companies that, of course, are going after different portions
of the kind of technologies that they're fighting over, but i think what's really going on here that's interesting is that consumers are getting to the point now where these devices are largely equivalent, they all roughly do about the same thing, and for hand setmakers to differentia differentiate, they have to do something that's pretty clearly different because the sheer basic functionality of the phones as these cases are showing us is common across many models. how they get there, whether that was legally clean or not, is another issue. but i think there's a real problem now with people finding that all phones are roughly equivalent and that's making differentiation harder in the market. the real thing ap sl trying to do is strike fear in the heart of companies that use the android operating system. >> thank you so much for that. interesting stuff and we'll wait for 5:00 p.m. tonight earn time. another big story this morning, president obama reportedly meeting with a group of tech ceos, including apple's tim cook, about government surveillance. we'll take a closer look in a few minutes' time. plus, just a few minutes
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taking a look at the major european bourses this morning, and there we go. the ftse 100 up 0.75%. meanwhile, small gains for italy and france and the central dax in germany add 0.1%. the chinese data sparked a rally in the mining sector. rio tinto up 3%. anglo american up almost 6. look at the dutch telecom group, also on the rise. >> no spike on the dow today though. we're off 134. bob pisani is on the floor having already covered almost half a dozen ipos, bob.
what do you think so far? >> we've got a problem. the market has been drooping every day in the middle of the week. you were talking earlier about the threat at the eiffel tower that's now over. i don't think that's it largely. we've had this problem throughout the week. let me put up some points that traders on the desk have been pointing out to me all during the week. it's been very illiquid. very low volume this month as we went into august. we've had yen strength. it happened again today, and on days when the yen is stronger, the markets have problems. 1700 is proving to be a major resistan resistance. we got over it for a day or two, but it keeps falling back. i think a lot of people think it's tough here. there's not a lot of catalysts although we did get better china news. speaking of china, the industrial production numbers were terrific. followed after good export numbers yesterday. all the commodity stocks, and etfs, coal, steel etfs, you can own these companies in single exchange traded fund. second dab y in a row we've see nice moves up.
building materials like masco have been week,k b home and pulte or down again. look at the itb, the home builders index. going into may this was the hot sector. we're at a new low, sitting at a low for the year. this is a basket of the big home building stocks. we mentioned the ipos. six of them pricing, but there are themes here. two hot themes for this week. software in the cloud, including event management software company cvent priced at $21, opened at $38. mix telematics, priced at $16, opened at $20. i want to point out, carl, that as the market has moved on throughout the day and it's been kind of weak, some of the ipos have weak eweakened. the average insider owns this
$4.61 is what the average insider owns cvent. >> a nice profit they're making on this friday. bob pisani from the floor. for more on the global cross currents, let's get to rick santelli in chicago. hey, rick. >> hey, kelly. i'd like to welcome ira harris. your blog last night was talking about japan. the big issue i have been talking about today is 1,000 trillion or a quadrillion yen, $10.5 trillion, record national debt. you were writing though about a slightly different topic but it all plays in. >> yeah. i was writing about if you talk about tapering, tapering back the sales tax -- >> in japan. >> because they're supposed to raise by next spring 3%, and then 2% the year after that. and i would say that the japanese should make it data dependent. if you're really getting growth, okay, but if not do it in incrementals on a slower basis so you can see and not make the mistake they did in 1997.
i think that's why the nikkei has stalled out a little bit, because it's trying to digest just what the impact is going to be as that tax goes into effect and you're going to bring a lot of economic activity forward before that -- >> that would certainly explain the relationship between the dollar/yen as well. >> yes, i think so. >> let's switch gears and let's talk yield curves. you tell the story about '94. >> i hear these people talking about how the recent activity in the bond market is reminiscent of 1994. >> the greenspan tightening period. >> when everybody in the bonds got killed. i would say that these periods couldn't be more different because if you look at the 2 ten-yield curve in 1994, that yield curve flattened dramatically. >> let me stop there. everybody can keep up with us. so right now we have short rates nailed to the wall, fed, scouts honor, we're not raising rates until 2015. the area that the fed really can control, not the long run, they did start raising, and the
market did kind of same thing it did with the taper. it doesn't price in all the little pieces. it prices in big chunks. so we saw short rates rise faster. there's the flattening. continue. >> so now in this one, if you look, the curve -- everybody talks about the tapering and the effect and while this is 1994, wrong. because the curve has steepened out, which is why in my work, and i have worked on this for 30 years, 35 years, steepening curves are bullish to the stock market. i can't time it for you directly but they don't hurt the market, and that curve is steepening out contravention to what happened in 1994. so i'm just debunking that myth that this is 1994. >> it got down to the 40s. >> maybe down to 10. >> right now we're at 2.30. >> when we started with the taper talk we were at 1.60 on the 2/10. we're just steepening out. >> it's always fun to talk to you. thanks for coming down this friday. back to you. >> tell ira had i for us, rick.
great stuff. see you later. priceline shares bucking the broader trend hitting a new all-time high surpassing its previous high back in 1999 of $9 $990. there are sure a lot of people who would have stuck with the stock. one of them is priceline spokesman william shatner who just tweeted this, congratulations to priceline on their stock price. wish i hadn't sold my stock all those years ago. i think he's done okay. i'm guessing he's done okay. >> we hope he didn't sell at the lows. it's got an nice rebound. ohio politicians, beware, your checkbooks are on notice. there's a new plan that would take the state's entire checkbook available online. josh mandel is here to tell us how it works next. he house? did you see the school ratings? oh, you're right. hey babe, i got to go. bye daddy!
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before a credit solution was used to expand their business... before trusts were created for their grandkids' educations... they chose a partner to help manage their wealth... one whose insights, solutions, and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust. coming up on "the half," the rally's next leg. where do stocks go from here? board room brawl, the latest on the jcpenney drama. and priceline's next price. is it $1,000? all that and much more at the top of the hour. we'll see you in a bit. >> looking forward to it. all week we've been talking about manufacturing in the u.s. mom and pops are making a bit of a comeback. but what are politicians getting
out of their shoring efforts at least beyond the economic benefits. eamon javers is investigating and he's in washington with more on this. >> we've talked a lot about the value of onshoring american jobs, but all those ribbon cuttings and announcements have some political value as well. >> one of our major goals has been to make things again. >> north carolina is moving forward. >> we think it's good for our state. >> reporter: it was a banner day in north carolina. lenovo announcing a new manufacturing plant. and as documented in this video, all the dignitaries were there to cheer on the company. >> hopefully this is just going to be the start of great things to come. >> reporter: that's the kind of public relations windfall that companies can count on when they announce new manufacturing jobs in the united states, but those announcements can be more than just an economic opportunity. they can also be an opportunity to curry favor with political officials here in washington. in fact, on this web page, the public relations company working
for lenovo that day boasts that five separate political leaders spoke on behalf of lenovo at the event and that the firm assisted them in the development of their talking points and messaging for the event. lenovo, a chinese computer company, is a firm that can always use some good press with the u.s. government and has sought to sell its products to the military, the state department, and others. >> this year apple will start making macs in america again. >> reporter: and it's not just foreign companies. tim cook scored a coveted seat at obama's state of the union speech earlier this year after his company announced it would invest $100 million to bring manufacturing jobs back to the united states. >> apple then sought successfully the holy grail of tax avoidance. >> that's the kind of intangible washington goodwill that can come in handy for a company. >> so help me god. >> reporter: especially when it comes under scrutiny on capitol
hill for its tax practices a few months later. tim cook has been doing that delicate dance with washington all throughout this entire year. a lot of issues on the table for apple here in d.c. >> and, eamon, speaking of tim cook, reports this morning that president obama met with him, with other tech ceos about government surveillance yesterday. is that right? >> yeah. fascinating story broken by politico about a secret, unannounced anyway, meeting at the white house between tech executives, including tim cook of apple, and also the ceo of at&t and others meeting with president obama himself just yesterday to talk about the secret issues involving surveillance in this country. now, we got a white house official to confirm the meeting. here is all they would say about the meeting though yesterday. they say the meeting was part of the ongoing dialogue the president has called on for how to respect privacy while protecting national security in a digital era. think about tim cook meeting sort of nose to nose with the president of the united states on this issue of privacy and digital surveillance at the same
time his company has issued up on capitol hill over their tax practices and other things. all of that, you know, in play, and the question is which of these things are poker chips in the giant negotiation that's going on behind the scenes? >> and an important one as well. eamon javers with the latest out of washington. thanks. >> if you're tired of wasteful government spending, our next guest is proposing an online checkbook that allows taxpayers to monitor government expenditures in his state of ohio. joining us this morning is the main sponsor of this legislation, josh mandel, the ohio state treasurer. good to have you. >> thanks for having me on. >> is this the first of its kind. >> there are other ones in the country. the way we are going to do it, it will be unique nationally. we will like to take the state's checkbook and put all that information on the internet for everyone to see. >> what would you be able to see? >> whether it's a check for 27 cents or $27 million, you're talking about everything from buying plumbing supplies and tables to large contracts to
vendors. i believe when you shine some light on government spending, that sunlight is the greatest disinfectant to waste and the more sunlight we can shine, the more efficient our government will be. >> how hard is it to do a project like this? what hurdles have you run into? >> it's a good question. the legislation is being introduced by a gentleman from cleveland. i'm a partner with him on it as the state treasurer. publicly, as you might imagine, everyone is for it. privately, there are some people in the bowels of the bureaucracy that are trying to throw marbles under our feet but we're going to stay vigilant because we think this issue is a bipartisan issue. whenever you can advocate in advance the cause of transparen transparency, it makes government more efficient. >> how is anybody going to have any context? how will they know how it relates to what the bids were, how you paid for this sort of thing in the past? >> it's a great question. if this information is just
tossed on the trinternet with n context, it could be dangerous. they will be able to go on and say i want see how this mandel guy is spending the money in the treasurer's office. they'll be able to see what i'm spending on office supplies, on salary, on vendors. get copies of the contracts. copies of the bids as well. in addition to that, they'll be able to search horizontally. compare my department to thee pa, to the department of transportation, to the department of education. let's say someone wants to go on and ask the question, i want to see what the government workers are spending on travel, on lodging when they go out of town for a conference. and they see four departments are staying at the holiday inn but one is staying at the ritz-carlton. we could say this is taxpayer money. why are these politicians spending our taxpayer money in that way? >> as useful as it is and as much as everyone should and probably will adopt this kind of thing, shouldn't some of the focus be on the issues which are
longer term problems for state's fiscal positions such as pensions and i bring this up because ohio and neighboring michigan has had all of these issues when it comes to detroit and funding its own system. in ohio i think you're somewhat underfunded. i think cnbc found you're in one of the positions they would be more worried about long term. isn't that to some degree pressing? >> i think they're both pressing. i think advocating for more transparency in government is important. to your point, the unfunded liabilities not just in ohio but nationally, it's an entirely different and i believe problem to a higher magnitude. we have to bear down as state treasures and governors and legislatures and have a conversation nationally about how to attack this problem. one of the main issues is that the rules the private sector has to live by are different from the rule the public sector lives by, and if we can apply more private sector accounting and private sector management to the government sector, i think these
pension funds would be more healthy. the state treasurer in colorado has been very active on this. he's been working on congress to bring more transparency to public pensions and keep your eye on the city of cincinnati. in ohio we have state pension funds, five funds, about $180 billion assets under management, but the city of cincinnati has their own pension fund. they're only about 61% funded, and right now the cincinnati city council along with the pension board in cincinnati are having a tug and pull, and this doesn't look exactly like detroit, but it's going down that path and i think it would be important for viewers to keep their eye on it. >> i hope you have strong servers if this thing ever goes live. thank you very much for coming in. josh mandel, the treasurer of ohio state. >> let's get to josh lipton with a market flash. >> we are watching caesar's entertainment, ticker czr. largest casino company in the u.s. as measured by gaming revenue. operates mostly under the
harrah's and caesar's brand name. they bought a golf course in macao a few years ago for some $600 million. couldn't get a license to make it into a casino so it sat there. they ran it at a loose. today caesar's telling us they are selling it for $438 million. that stock is up about 160% so far this year. ca carl, back to you. this weekend marks the final days of the pga championship on cbs. you might not know it if you're a customer of time warner. we'll find out whether the cbs/time warner blackout is bad for business. [ male announcer ] come to the lexus golden opportunity sales event and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪ this is the pursuit of perfection.
the final rounds of the pga championship will air on cbs this weekend. from rochester, new york, but how will the battle between time warner and cbs affect the sponsors. belvedere is a sponer of the tournament. joining us is carl gibb to give us his viewpoint. >> we're following it very closely because i'm just keen that people get to see the final rounds of the pga over the weekend. and it would be very disappointing for a lot of viewers if they won't be able to see the final rounds of golf's
final major this year. >> right. >> who do you blame? whose fault is it? >> i don't want to attribute blame to anybody. i mean, it's a dispute between the two parties. it doesn't affect belvedere's sponsorship or what we're doing. we have a lot of activation taking place regardless of that. >> did you think it would go this far? a lot of people didn't see this exact scenario. >> i didn't think it would go this far. >> i wonder how important these kinds of events are for you guys? how much do you spend on sponsorship and how much do you rely on the pga for example to increase brand awareness. >> we spend a lot on sponsorship but the tv is just part of it. we're activating in bars. there will be a lot of viewing parties in country clubs around the u.s. over this weekend. but more importantly for me the relationship with the pga goes much, much dope e deeper than t. we're the official vodka of all the 27,000 pga professionals who operate at the grassroots of the game around the country, and belvedere is very proud to be a part of that.
>> sponsorships are a big part. i'm curious about the way you split your marketing spend, right? to what degree has it migrated to social, to digital, and at what pace is it doing that? >> the key thing in today's world is to get the balance right. there's clearly traditional advertising which is still very, very powerful, but a huge amount of money now goes into -- and money -- more effort than money really goes into social, goes into digital, goes into the ways you think about how to interact with your consumers. our consumers, 25 to 35-year-old males, females, go out a lot. so being interactive and being able to engage them in the right manner at the right time is absolutely critical, and social is a key part of that. >> i was going to ask how many of your customers are the pga tour types as opposed to the teenagers and young adults who are drinking vodka and going out. >> no teenagers for belvedere. clearly we believe in responsible service and responsible consumption of our brand. so 21-plus only.
but we've got a diverse target market. 25 to 35 would be our core group. and those guys and girls are both -- they play golf, this he relax, they go to the sports bars, they do those things but equally they're out in the clubs and bars partying and enjoying themselves. >> finally, the perfect temperature for which vodka is to be serves is? >> i would say slightly chilled. never too chilled because you don't want to stun the flavor and stun the taste. i would say slightly chilled, and for belvedere certainly on the rocks, a little twist of lime, splash of soda. that's the way i drink mine. >> are we allowed to drink before noon? >> ready for one of those. >> really appreciate you coming by. >> thank you very much indeed. >> dow is trying to come off the lows here. we will take a closer look at the afternoon action that's in store when we come right back. a-a-a.
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our screens the last three months, what's led to the downside. four of the top ten losers on the s&p in the past three months are housing. it's horton, lennar, kb, and pulte. that does tell you a lot about how the psyche has changed in the past 90 days. >> we continue to see whether it's the mortgage application data lagging. and again this question of how much does the fed matter, how much can this move in interest rates matter? the answer is here. it has taken some of the froth out of that space. >> we have been on this desk all week talking about the retailers. it seems like every day there's been one -- i won't say disaster but a real disappointment. i'm thinking of an american eagle, an aeropostale, ralph lauren. >> elizabeth arden. one after the other. and the back to school season where you shave citigroup sayin walmart will be their top pick. >> we'll see what the afternoon brings. a lot of drama between
blackberry and jcpenney. who would have thought we would have gotten two big corporate dramas on a friday in august. >> or that the first $1,000 stock potentially in the s&p 500, priceline. could happen. maybe not today. >> there's a look at jcp. have a great weekend. let's get back to wapner who has had a busy day already. "the halftime" back at hq. >> thanks so much. welcome to the halftime show. four hours to go until the close. behind me on the wall is where we stand on this rainy new york friday on the street. there's the dow down 116. s&p and nas are negative, too. board room brawl. very latest in the jcpenney saga. more letters, accusations, even some insuments. and the $1,000 stock. as priceline surges, could that milestone be the next stop for this high flyer? first, our top story, the bull market's next leg. with stocks about to snap six weeks of gains wrsht